Brazil is projected to reach 40 gigawatts (GW) of distributed solar photovoltaic (PV) capacity by 2025. This growth is being driven by a significant surge in solar installations as consumers and businesses rush to complete projects before new regulations take effect. These regulations will introduce grid usage fees and charges for other services. Despite the challenges facing the sector, this growth trend is still expected to be achieved.
New Fee Structure Impacting Brazil’s Solar Capacity
Starting in 2025, distributed solar power generation in Brazil will be subject to distribution grid usage fees and charges for additional services. These fees will be calculated based on installed capacity rather than net energy consumption. This change, established by Resolution No. 1074/2023, is expected to increase consumer costs and alter the financial landscape for solar investments.
The fees, based on installed capacity, will apply to distributed generation (DG) projects below 1.5 MW and remote self-consumption projects below 1 MW. Projects connected to the grid before January 2023 are exempt from these fees until 2045. This exemption has triggered an installation boom, with numerous consumers and companies accelerating their installation schedules to avoid the impending costs.
Expected Growth and Challenges for Brazil’s Solar Capacity
Significant growth is anticipated in the distributed solar sector in the coming years. Brazil’s National Electric Energy Agency (ANEEL) forecasts the country’s distributed solar capacity will reach 40 GW by 2025.
However, experts warn that the new fee structure could slow the growth rate afterward, as consumers might become more hesitant to invest in solar systems. In 2022, Brazil added nearly 10 GW of new distributed solar capacity, reaching a total of 21 GW by year’s end. This rapid expansion was largely fueled by the deadline associated with the new fee structure, as consumers rushed to install solar systems before the fees took effect.
Despite the promising growth prospects, Brazil’s distributed solar sector faces several challenges. The new fee structure could diminish the financial appeal of solar investments, particularly for smaller consumers who may struggle to bear the additional costs. Furthermore, the sector must navigate regulatory uncertainty and potential changes in government policies that could impact future growth.
Regulatory Framework for Brazil’s Solar Capacity
The new regulations aim to address financial imbalances caused by the growth of distributed generation. While DG, which allows consumers to offset their electricity bills by generating their own power, has driven remarkable growth in the solar sector, it has also posed challenges for utilities. These companies must still maintain the grid infrastructure but receive reduced revenue from solar users.
The fees being introduced in 2025 are designed to ensure that distributed generation users contribute to the costs of maintaining the grid and providing reliable electricity service. However, critics argue that these charges could stifle innovation and slow the transition to renewable energy, disproportionately affecting residential and small commercial users.
